40 years after the return of democracy in Argentina, Javier Milei heralded a new direction for the South American country this Sunday. With his back to Congress – “the political caste” – and in the face of the people who voted for him, the far-right president gave a scathing first speech about the legacy he has received and publicly warned that he would begin his term in office with a very tough break will spend around $20 billion: “There is no alternative to adaptation, there is no money.” The panorama he painted was so stark that even the thousands of supporters who had gathered in the streets during part of the presidential speech fell silent.
The decision to break the tradition of speaking to the Legislative Assembly was a symbolic gesture of far-right populism, which is taking its first steps in Argentina with Milei. He did so in the company of other leaders of this emerging global trend, such as Hungarian Prime Minister Viktor Orbán, former President of Brazil Jair Bolsonaro and the leader of the Spanish Vox party Santiago Abascal, who were invited to the inauguration ceremony.
“Today we end a long history of decadence and decline and begin the journey of rebuilding our country,” the president began on the steps of Congress to a packed court. It first went back to a supposed golden age for Argentina, at the end of the 19th and beginning of the 20th centuries, when the South American country was the “breadbasket of the world,” and then quickly returned to the bomb that was ready to explode it it received it from the Peronist Alberto Fernandez. “No government has received a legacy worse than what we are receiving,” he warned. Contrary to the optimistic vision expressed by Mauricio Macri when he took office in 2015, Milei repeatedly reiterated that the country he was receiving was a scorched earth.
Official figures on the situation in Argentina show that the economy is in a critical situation. During Fernández's four years in office, inflation nearly tripled – from 54% to 142% – and poverty rose five percentage points to over 40%. The primary deficit is 3%, Argentina is indebted to external and internal creditors, there are no dollars in the central bank and the real value of the peso, the national currency, is at rock bottom.
Fernández leaves with a high rejection rate from his management of over 70% and plans to move to Spain after the handover of power. When he arrived in Congress that Sunday, he left quickly and without turning to look at the crowd waiting for his successor and chanting slogans against his vice president, Cristina Fernández de Kirchner.
The specter of hyperinflation
The data disseminated by Milei is much worse than the official one and among them emerged one of the ghosts most feared by Argentines, that of hyperinflation. The last one was in 1989 and no one who witnessed it could forget it. This year the price increase was 3,079%: it was impossible to know how much a kilo of flour or a bottle of oil cost because prices changed between morning and noon. Poverty skyrocketed and supermarkets in popular neighborhoods were looted. “You leave behind inflation of 15,000% per year,” warned Milei this Sunday.
“Our goal is to do everything we can to avoid this,” he emphasized. The risk of failure would mean that poverty would increase by up to 90% and half the population would be destitute, meaning they would not have enough income to even buy food.
The recipe for rebuilding Argentina proposed by Milei is sweat and tears. He expected to make a spending cut equal to 5% of GDP and indicated that he would eliminate subsidies for public transport, gas, electricity and water. The numerous times he stressed the inevitability of adaptation are reminiscent of British Conservative Margaret Thatcher's political slogan in the 1980s: “There is no alternative.” Like her, Argentina's new president believes the solution is to change ours to open arms to the market and that any other solution is doomed to failure.
Milei is preparing a massive legislative package to send to Congress in the coming days and also expects to call extraordinary sessions. His party, La Libertad Avanza, has only 15% of deputies and 10% of senators and must negotiate every step necessary to pass new laws and reforms. However, he is confident that at least the first measures will meet little resistance, given the number of votes in favor of them, namely almost 56% of the population.
Support for the new president is majority, but not complete, in an Argentina that is more polarized than ever before. Millions of people perceived his words as a message of hope and were convinced, as he had promised, that the impending sacrifice was “the last bad drink to begin the reconstruction of Argentina.” They greeted him and cheered him in the streets, chanting “Argentina” and “Freedom.” Others, however, trembled when they read between the lines that a new era of privatizations and market-oriented economic policies is beginning, which follows on from that of the Peronist Carlos Menem in the 1990s and remembers that the country then exploded with the Corralito crisis of 2001-2002.
It is unknown whether this polarization translates to the road. Argentina has a long history of opposing unpopular laws, but the government warns it will not sit idly by in this case. He will respond harshly to those who oppose him with violent protests and unauthorized road closures. “To those who want to use violence or blackmail to bring about change, we say to them that they are acting against us. We tell them that they will find a president with unwavering convictions who will use all of the state's resources to advance the changes our country needs.” The person responsible for applying the heavy hand will be Patricia Bullrich , who reappears in the security portfolio after holding the position under Macri's presidency.
Milei has four years full of great challenges ahead of her. This economist, the first to reach the Argentine presidency, is in a hurry to get started.